Consider the following financial statements of the company Pure Nature on December 31, 2016:

Pure Nature

Balance Sheet

December 31, 2016

Assets
Cash	$200,000
Marketable securities	225,000
Account Receivable	625,000
Inventories	500,000
Total current assets	$1,550,000
Net fixed assets	$1,400,000
Total assets	$2,950,000
Liabilities and Stockholder's Equity
Accounts payable	$700,000
Notes Payable	295,000
Other current liabilities	5,000
Total current liabilities	$1,000,000
Long Term debt	500,000
Total liabilities	$1,500,000
Common Stock	$75,000
Retained Earnings	1,375,000
Total Stockholder.s Equity	$1,450,000
Total Stockholder's Equity and liabilities	$2,950,000

Puere Nature

Income Statement

For the year ending December 31, 2016

Sales Revenue	$5,000,000
Less: COGS	2,750,000
Gross Profit	$2,250,000
Less: Operating expenses	850,000
Net Profits before interest & taxes	$1,400,000
Less: Interest expense	200,000
Net profits before taxes	$1,200,000
Less: Taxes (40%)	480,000
Net Profits after taxes	$720,000
Less: Cash dividends	288,000
To retained earnings	$432,000

Consider the following information

a. It is estimated that sales for 2017 will be $6,000,000.

b. The cost of goods sold (COGS) in 2016 includes $1,000,000 in fixed costs.

c. Operating expenses in 2016 included $250,000 in fixed costs.

d. Interest expense will remain unchanged.

e. 40% based on earnings after tax dividends (net profits after taxes) are paid

f. Cash and inventories will double

g. The marketable securities, notes payable, long-term debt and common stock, remain the same.

h. the accounts receivable, accounts payable and the other current liabilities change in direct relation to the change in sales.

i. A new computer system valued at $356,000 were bought during the year. Depreciation expense for the year will be $110,000.

j. The tax rate remains 40%.

Instructions

1. Evaluate the financial statements of the company.

2. Use the financial information of these states and provides further that in the same year to prepare the financial plan of the company:

a. Prepares a Statement of Income and Expenses pro form using the method percent of sales.

b. Prepare a balance sheet using the pro forma assumptions administrative method (judgmental approach).

c. Discusses the use of pro forma statements. By taking place? What role do they have?

d. It analyzes the states and discusses whether or not you need an external financing (external financing). Give a reason for your answer